GS: Budgetary cuts: ITO- In what areas would you expect budgetary cuts with your customers in 2012? How would these cuts impact IT outsourcing? Or is there a scope for increased spends? Where and why?

SATYA: I don’t see any cuts in IT budgets in 2012.  Customers still need to maintain their existing systems – “lights on” support and the projects that started in 2011 will be completed.  However, there will be no increase in budgets except in Healthcare where the Meaningful Use / ARRA dollars will push new EMR deployments in US market.

GS: Budgetary Cuts: BPO- In what areas would you expect budgetary cuts in 2012? How would these cuts impact BPO activity? Or is there a scope for increased spends? Where and why?

SATYA: In fact I see more spends on BPO as they have low impact on business but will help organizations save costs.  I see more of shared services being outsourced – in fact the vendors will look for newer opportunities to save costs of their customers. This will be a “win-win” situation for both the customers and the vendors.

GS: What are some of the shifts in the dynamics of global services (include global sourcing of services, outsourcing, offshoring, IT services, BPO) you would expect in 2012?

SATYA: I see more focused solutions to be offered to customers.  Many customers are now looking for value beyond costs arbitrage and efficiency gains.  So, vendors need specialization to provide better services at same costs.  Companies with deep vertical expertize will benefit.  I also see a consolidation happening which will result in more M&A in the space.

GS: If you are an enterprise services buyer, how have your expectations from service providers changed? If you are a service provider, how have your customer’s expectations of you changed?

SATYA: Customers are now very clear on what they want.  They are asking vendors to show value beyond “pure vanilla” services.  “Value-add” is going to be the name of the game.  The expectation of the customers is to see reduction of costs as vendors maintain their systems for long.   There will be pressure on vendors to become more efficient.

GS: Amongst the various segments in IT outsourcing a) Application development and maintenance b) Infrastructure management c) Packaged applications implementation and d) product engineering/ development- what is the outlook for 2012? What are some of the new drivers for these segments? What shifts do you observe in these segments and overall IT outsourcing?

SATYA: There will be no impact on ADM and RIM (Remote Infrastructure Management) services.  There will be reduction in new packaged applications implementation and new product development.  In healthcare, we see more investments being made in packaged applications implementation and product development.  This is because of “Meaningful use” pressure on providers to comply with.

GS: Amongst the various segments in BPO: a) Customer Service and contact center b)FAO and procurement c)HRO d) Analytics e) various industry-specific processes – what are the new drivers and outlook for 2012? Are there any observable shifts in the nature of BPO work being outsourced?  

SATYA: New opportunities would emerge in other segments of BPO as cost reduction will be primary goal of many organizations.  In healthcare, which we serve extensively, new opportunities in CDI (Clinical Documentation Improvement), Clinical Analytics and Contract management will emerge.

GS: Which are some of the most promising verticals in ITO for 2012? For BPO?

SATYA: Healthcare (especially on provider side) will emerge the most promising vertical for both ITO and BPO in 2012.

GS: If you were to give three pointers for ITO/ BPO in 2012, what would they be? How should service providers align themselves to these? How would enterprise buyers of services align themselves to these?

SATYA: (1) Specialize / verticalize (2) Implement better processes to reduce costs and (3) Look for new opportunities in BPO that would help customers with cost containment.  It is getting very clear that customers are now looking at specialized offerings.  They want vendors to solve business problems and also help them with cost containment. New focused solutions that address specific business problem will be in demand.

GS: Any specific comments on specific emerging areas, geos, practices, etc. related to outsourcing in 2012?

SATYA: Healthcare will emerge as a new vertical where companies will grow.  ITO and BPO will offer new opportunities for vendors as there is still a huge potential to grow in healthcare.  As there are big dollars being spent on EMR, US will continue to attract attention of healthcare IT companies.